Affordable housing: a route to a fair deal between generations

Housing is no longer a background concern; it is a defining political issue for a generation that is spending more of its income on rent, delaying life decisions and losing confidence in institutions that are supposed to deliver for them. For many young Europeans, access to a decent and affordable home is becoming a test of whether our economic and political systems can still offer them a fair deal.

In September, the European Commission presented the Affordable Housing Act, providing cities and member states with a clearer legal framework to act where housing pressure is most acute. It is a significant and welcome step.

At Friends of Europe, we have been working on this question with our European Young Leaders (EYL40) community. In May 2026, we convened the EYL40 Housing Lab, bringing together mayors, investors, policymakers, social entrepreneurs and city representatives to define what Europe’s response to the housing crisis should look like in practice.

Today, we are publishing their answers in the Affordable Housing: a route to a fair deal between generations report, which identifies five priorities:

1. Reform the rules, revising EU state aid rules that can constrain public investment in intermediate affordable housing, and ensuring the Affordable Housing Act delivers the regulatory flexibility cities need to act.
2. Unlock alternative capital, mobilising dormant assets, scaling social impact bonds and developing a social taxonomy for housing investment that mirrors the incentives that have successfully redirected private capital toward green investment.
3. Expand affordable ownership models through community land trusts, housing cooperatives and rent-to-own schemes that structurally keep housing within reach of those who need it most.
4. Expand housing supply through inclusionary zoning, repurposing empty and underused buildings, and targeted EU initiatives for mobile young people, including students and trainees.
5. Share what works by building a knowledge infrastructure that gives smaller and medium-sized cities access to a practical database of proven housing solutions designed for implementation.

But this debate is about more than housing. It is also about the future of European democracy.

People expect democratic institutions to respond to the pressures shaping their everyday lives. When younger generations work, contribute and play by the rules but increasingly feel that a secure home remains beyond their reach, frustration grows and trust erodes.

Affordability also shapes political choices. Rising prices and the cost of living are already influencing how people vote, and housing is one of the highest and most immediate costs they face.

Addressing Europe’s housing crisis is therefore not only a question of affordability or intergenerational fairness. It is also about showing that democracy can respond to people’s concerns and improve their lives. What comes next is a question of political will.

Read the full report here.